Future of real estate market in Belgrade lies in projects for middle class of up to EUR 120,000 – “Time of buyers” coming, investors should be careful in next two and a half years, analyst advises

At the moment, the real estate market in Belgrade is facing considerable changes. According to the estimates, there are currently more than 4,000 fully finished, but unsold apartments, as well as around 4,500 apartments which have been sold, but nobody has moved into them and they haven’t been rented out either. In addition to that, many buildings under construction are facing slower sales than two or three years ago, Nikola Senesi, an analyst and founder of NAI WMG, says for eKapija.

– Just take a look in the evening, how many lights are on in the buildings – our interviewee says.

The stabilization of the real estate market, according to him, has already started, but the lowering of interest rates, paradoxically, has led to an additional slowing down.

– In the past year and a half, the growth of the real estate prices has been lower than the real inflation in the conditions of a fixed rate. The same happened in one quarter of 2022, after which there was a short growth again after the Russians and the Ukrainians started coming in, but let me remind that that is not a normal market foundation. As things stand now, I expect a considerable stabilization by the end of this year. We are entering a period of a market of buyers – points out Senesi.

He adds that this can be seen in the ads – 18 months ago, it was nearly impossible to find apartments in attractive locations in the ads, and they are there, he says, and they are very slow and hard to sell.

– In time, this will certainly lead to a drop in the prices – he adds.

EXPO like Belville

According to our interviewee, the EXPO 2027 project is expected to be a considerable factor in shaping the real estate market.

– EXPO is a fantastic project. Those apartments with direct rail lines are exactly what Belgrade needs. Those are apartments that families with average salaries can buy with a loan. Fifty to sixty square meters, costing 100 to 120 thousand euros tops. That would be a normal market – he says.

Senesi expects to see similar private projects in Mirijevo, Zeleznik, Makis and other similar locations.

– Apartments for the middle class and quality banking financing. I believe that EXPO will stimulate that model. Similar to what Belville did for the whole New Belgrade after the University Games – he believes.

Advice for buyers and investors

For the buyers, now is not an ideal time to invest in real estate due to the stagnation of the prices and a low profit, advises Senesi.

– Not all real estate is the same and it’s always possible to make a decent amount of money in that business, but purchasing apartments as an investment should be avoided at the moment. Everything speaks against it. The stagnation of the prices, the all-time low profits – don’t forget that EUR 100,000 from 2016 is only EUR 58,000 now – taking the real inflation into consideration.

As for real estate for housing, in most cases, projects for the middle class are only just being built or are in the process of getting permits.

– I would wait to see what happens with EXPO apartments and a few similar projects. On the other hand, not everybody can afford to wait. In that case, my advice is to try to lower the price as much as possible. Many investors already have to lower the prices – our interviewee explains.

The sellers and investors, he advises, should be cautious and adapt their strategies to the current situation in the market.

– Regardless of a lower profit, this is a positive trend for them too. They know themselves and often don’t admit how the sales are going. It’s nowhere near the dynamics from before – he says.

As for the new cycle, he advises them to go to the middle-class segment.

– On rail and future subway routes, small two- and three-room apartments of 50 to 60 square meters, with a mandatory kindergarten and school nearby – apartment prices up to EUR 120,000. I would also advise them to be very careful in the next two and a half years. Further price speculations may cause the bubble to burst, which is very dangerous – he says.

The stabilization of the market and the prices of real estate leased in Belgrade is already happening, according to him.

– The stabilization is already apparent, with a lowered inflation and purchasing power of the Russians and the Ukrainians, the rent prices have gone down as well – our interviewee points out.

The per-day apartments, he adds, have also become less attractive and those apartments are increasingly being rented out normally again.

– We have to change our way of thinking and realize that a stabilization or a price drop is good for all participants. It’s the worst when the market is dormant as is the case right now and when there’s a risk of a sudden bubble-burst. The sooner the stabilization happens, the lower that risk is – our interviewee concludes.

I. Zikic